Mount Holly settles high-profile housing bias lawsuit

A man walks past a home in the Mount Holly Gardens section of Mount Holly. The attached neighboring home has been razed, leaving a wall of tar exposed.Andrew Mills/The Star-Ledger

MOUNT HOLLY — Officials in a southern New Jersey town approved a legal settlement today to end a high-profile housing discrimination case, just weeks before the U.S. Supreme Court was to hear arguments on it.

Under the agreement with Mount Holly township, a group of residents of the Mount Holly Gardens neighborhood will be able to get homes in a new development or money if they choose to move elsewhere.

The deal halts one of the most anticipated Supreme Court cases of the terms. It was to be heard next month. Lawyers in the case say settlement talks had been in the works since before the high court agreed to take it on.

The lawsuit grew out of opposition to a plan announced in 2002 in the community, 20 miles east of Philadelphia. The town wanted to raze the 329 modest brick homes in the aging Mount Holly Gardens, long a center of blight and crime, to make way for new houses, apartment buildings and stores.

Residents sued, saying their payments for selling their homes would not be enough to buy new homes in the area. They also argued that the plan amounted to discrimination because three-quarters of the residents were minorities.

In 2011, the 3rd U.S. Circuit Court of Appeals in Philadelphia agreed that the residents had made enough of a claim to go to trial on the disparate impact of the township's plan. But the court also found that there was insufficient evidence of intentional discrimination.

The redevelopment has not happened yet, though most of the old homes have been knocked down, leaving only 60 of the homes originally built for veterans after World War II.

The Obama administration supports the theory used in the case — that discrimination can be found based on results of a project or practice, not just whether discrimination is intentional.

A vote was initially scheduled last week on a settlement, but it was removed from the council docket hours before the meeting. Officials said at the time that they still had technical glitches.